HSBC moved millions in Ponzi scheme, leaked files reveal

HSBC has allowed fraudsters to transfer millions of dollars around the world even after it had learned of their scam, according to leaked secret files.

As reported by the BBC, the bank moved the money through its US business to HSBC accounts in Hong Kong during 2013 and 2014.

The leak of documents, known as the FinCEN files, revealed HSBC’s role in the $80m Ponzi scheme, equal to £62m. A Ponzi scheme is a fraudulent investing scam that promises high rates of return with little risk to investors, and generates returns for early investors by acquiring new investors.

The FinCEN Files are a leak of 2,657 documents, which include 2,100 suspicious activity reports (SARs), and they show the investment scam started soon after HSBC was fined $1.9bn (£1.4bn) in the US over money laundering, after promising to clamp down on such practices.

Commenting on the revelation, CEO at anti-money laundering (AML) expert SmartSearch, John Dobson, said: “This is nothing short of a betrayal for all those thousands of businesses doing their bit in the global fight against money laundering and financial fraud.
 
“We speak to customers in the UK and the US day-in, day-out, who are all working hard to make sure they have the best tools and technology available to prevent money laundering, and to be compliant with the law. While at the same time, if these documents can be believed, one of the world’s biggest banks has effectively turned a blind eye and enabled criminals to take full advantage.
 
“These revelations couldn’t have come at a worse time of course, with so many businesses reeling from the ongoing affects of the COVID-19 pandemic, and the extra security threats that has created. Events like these are hugely damaging for the banks involved but also for all the other banks who are trying to stamp out money laundering, and it cannot go unpunished.
 
“Over the years, SmartSearch has developed more and more enhanced levels of security for its customers in a bid to stay ahead of the criminals. Never for a moment did we consider we’d have to stay one step ahead of the institutions we thought we were trying to protect.”

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